Multiple Choice
Assuming the demand curve is more elastic (flatter) than the supply curve, which of the following is true?
A) The full tax is always passed on to the consumer no matter how flat (elastic) the demand curve is.
B) The full tax is always passed on to the seller no matter how flat (elastic) the demand curve is.
C) A smaller portion of sales tax is passed on to the consumer.
D) It does not make any difference how flat (elastic) the demand curve is; the tax is always split evenly between buyer and seller.
Correct Answer:
Verified
Correct Answer:
Verified
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